Fresnillo silver output up almost 11pct in first quarter, but gold falls

Mexico-focused precious metals miner Fresnillo (LON:FRES) reported Wednesday increased silver output for the three months to the end of March and noted that while gold production fell in the period, it remains on track to meet its full 2017 production guidance.

Silver output rose thanks mainly to the contribution of the first phase of its San Julián mine in Mexico.

Fresnillo, the world's largest primary silver producer and Mexico's second-largest gold miner, said output of the grey precious metal rose by 10.7% compared the same period last year to 13.5 million ounces, thanks mainly to the contribution of the first phase of the San Julián mine, which is considered a cornerstone of the company’s 2018 production goals.

Bullion production, however, was down by 3.3% at 222,300 ounces due to a one-off reduction of inventory levels at its Herradura operation last year as well as expected lower ore grades at the mine.

The London-listed miner said it is on track to achieve 2017 production guidance of 58 million to 61 million ounces of silver and 870,000 to 900,000 ounces of gold. This as it sees demand for gold to remain strong on global geopolitical uncertainty , while a drop of the Mexican peso continues to peso push the miner’s costs lower.

“We continue to focus on maximizing efficiency and productivity across all our mines,” Chief executive Octavio Alvídrez said in the statement.

Shares in the company dropped 1.3%, closing at 1,483.39p in London.